Citizens Accused of Engaging in Ponzi Stock Scheme
A securities class action complaint has been filed against Citizens. The complaint is brought on behalf of all purchasers of Citizens securities between March 11, 2015 and April 27, 2017, for alleged violations of the Securities Exchange Act of 1934 by Citizens’ officers and directors. According to the complaint, Citizens uses deceptive marketing practices to lure clients into purchasing insurance policies. While Citizens’ brokers masque themselves as financial advisors with international licenses, they permit Citizens’ sales associates to input inaccurate stock projection information into marketing collateral distributed to their clients. Moreover, the multilevel marketing sales force has continuously marketed the policies as tax-exempt even after the company officially recognized that the majority of its policies are not tax-exempt. As a result, Citizens’ stock price was artificially inflated until March 8, 2017, when it was reported that the company was under investigation by the U.S. Securities and Exchange Commission and Internal Revenue Service for its unlawful business practices.